The Virgin Islands Cabinet has approved an additional $150k towards economic substance legislation as the government makes moves to put itself in good standing with Europen Union (EU) requirements as an offshore financial services jurisdiction. Photo: Internet Source

In 2018, Hon Julian Fraser RA (R3) in making his contributions to the debate a Bill, entitled 'Economic Substance Company and Limited Partnership Act 2018,' tabled in the House of Assembly (HoA) on December 18, described the requirements of the EU as “untenable”. Photo: Facebook/File

His Excellency the Governor Augustus J. U. Jaspert chaired a Special Meeting held on December 13, 2019, at the Premier’s Conference Room in the Honourable Ralph T. O’Neal Administration Complex where the decision was made.

Furness & Rivett tasked with legislative solution 

According to the report, Cabinet “Decided to approve an additional one hundred and fifty thousand dollars ($150,000) to cover additional work on Economic Substance legislation and related matters and approved an additional payment of $114.485.19 to Messrs. Michael Furness and Jack Rivett for additional work completed on the said legislation.”  

In 2018, the Government hired Jack Rivett to assist the previously hired Queen’s Counsel, Michael Furness, in drafting legislation intended to keep the territory off the European Union’s (EU) blacklist of tax haven jurisdictions.

EU requirements is that offshore financial companies must have physical offices in the territory, EU member France has since blacklisted the VI along with The Bahamas, Anguilla and the Seychelles for being “not cooperative enough in terms of financial transparency.” 

‘We are in Trouble’ – Hon Julian Fraser RA

In 2018, Hon Julian Fraser RA (R3) in making his contributions to debate a Bill, entitled “Economic Substance Company and Limited Partnership Act 2018,” tabled in the House of Assembly (HoA) on December 18, described the requirements of the EU as “untenable”.

Mr Fraser further noted, “The tasks that we are pursuing Madam Speaker, are so mammoth and it is so unrealistic we have to come to the reality that we are in trouble.”

This trouble, according to Hon Fraser, is because “economic substance is actually the setting up of headquarters in the BVI for these companies that we have registered.” 

He said those headquarters are not just an individual sitting behind a desk but rather, they are actually supposed to perform as local companies, “Will that ever happen? Can you see that happening?” Hon Fraser posited as questions to the house.